Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 5th, 2014
Benefits & Administration
Changes Ahead for Public DBs
With some equity markets near historic highs and interest rates in the U.S. poised to rise, achieving returns going forward may be more challenging for public defined benefit (DB) plans than the past few years. In addition, public DB plan sponsors will need to consider a number of other important factors as they contemplate investment strategy and asset allocation in 2015 and beyond, according to Michael A. Moran, senior pension strategist at Goldman Sachs Asset Management. New accounting standards from the Governmental Accounting Standards Board (GASB), will move the valuation of assets from an actuarially smoothed methodology to a market value framework. The new GASB rules were finalized in 2012, but are just now starting to go into effect. From now over the course of 2015, public DBs will start new reporting, Moran says.Read more >
Millennials Open to Employer Prompting on Wellness
Millennials put a lower priority on medical care than other generations, but they are the most likely to want employers to play an active role in supporting their overall health and wellbeing.Read more >
Study Suggests DB Plan Cost Half That of DC Plans
A defined benefit (DB) plan, modeled with the typical fees and asset allocation of a large public plan, has a 48% cost advantage compared to a typical individually directed defined contribution (DC) plan, the National Institute on Retirement Security (NIRS) concludes in its recent analysis. Further, the DB pension costs 29% less than an “ideal” DC plan that features the same low fees and no individual investor deficiencies. According to the NIRS, annuitizing DC account balances does not erase the DB pension cost advantage. Annuities offered by private insurance companies would only modestly decrease DC funding requirements at historical average interest rates, and would increase costs at 2014 interest rates.Read more >
Sponsored message from The Newport Group
Newport #1 in “Best in Class” Awards in 2014 PLANSPONSOR DC Survey
The Newport Group, a national provider of retirement and executive benefit plans, is #1 in “Best in Class” awards in PLANSPONSOR magazine’s 2014 Defined Contribution Survey. Newport earned a record 72 awards-more than any other provider in the retirement industry.Read more >
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Products, Deals & People
A new partnership will bring content from the Financial Planning Association (FPA) to clients of LifeCare, a company providing work/life services.Read more >
New York Life Investment Management announced the signing of a definitive agreement to acquire IndexIQ, a firm specializing in liquid alternative exchange-traded funds. New York Life’s MainStay Investments business will leverage the acquisition of IndexIQ to enter the exchange-traded fund (ETF) market “with dominant position in alternative ETFs,” the firm says, calling the acquisition its first entry into the ETF industry.Read more >
Economic Events

In the week ending November 29, the advance figure for seasonally adjusted initial claims for unemployment insurance was 297,000, a decrease of 17,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 299,000, an increase of 4,750 from the previous week’s revised average.

The average interest rate for a 30-year fixed-rate mortgage is 3.89%, down from 3.97% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.10%, down from 3.17%.

Market Mirror

Thursday, the Dow slipped 12.52 points (0.07%) to 17,900.10, the NASDAQ was down 5.04 points (0.11%) at 4,769.44, and the S&P 500 decreased 2.41 points (0.12%) to 2,071.92. The Russell 2000 lost 6.00 points (0.51%) to finish at 1,173.01, and the Wilshire 5000 closed 31.88 points (0.15%) lower at 21,733.20.

On the NYSE, 3.2 billion shares changed hands, with 1.7 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with a 1.5 to 1 ratio of decliners to advancers.

The price of the 10-year Treasury note was up 12/32, with its yield down to 2.238%. The price of the 30-year Treasury bond increased 31/32, decreasing its yield to 2.937%.

Compliance
Plenty of Regulatory Action Ahead in 2015
Upcoming actions from the Department of Labor (DOL), the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA) are all expected to have a direct impact on the way retirement plans are administered under the Employee Retirement Income Security Act (ERISA) and other legislation. Substantial attention is also being paid to the potential for the U.S. Congress to pass meaningful tax reform at some point in the next few years, according to Drinker Biddle experts, which could involve the reduction or elimination of some tax benefits for workplace retirement savers in the interest of growing government revenues.Read more >
From the Magazine
From the Magazine: Data Security
Service providers and human resource (HR) professionals who oversee employee benefit plans are thinking hard about how they can ensure they are protecting participant data in the wake of historic digital security breaches at well-known U.S. companies. Here are some tips.Read more >
Small Talk

ON THIS DATE: In 1776, in Williamsburg, Virginia, at the College of William and Mary the first scholastic fraternity in America, Phi Beta Kappa, was organized. In 1782, Martin Van Buren, America’s 8th president, was born in Kinderhook, New York, to Dutch parents. In 1933, the 21st Amendment to the U.S. Constitution was ratified, repealing the 18th Amendment and bringing an end to the era of national prohibition of alcohol in America. In 1945, the so-called “Lost Squadron” disappeared over the Bermuda Triangle. The five U.S. Navy Avenger bombers carrying 14 Navy flyers began a training mission at the Ft. Lauderdale Naval Air Station. They were never heard from again. In 1951, the first push button-controlled garage opened in Washington, D.C. In 1983, the video arcade game “NFL Football” was unveiled in Chicago. It was the first video arcade game to be licensed by the National Football League.

 

And now it’s time for FRIDAY FILES!

Sometimes you just have to take a break from work and dance.Read more >

In Newport News, Virginia, a would-be robber entered a 7-Eleven in the early morning hours and demanded cash from the clerk. The clerk opened the cash register drawer and showed the suspect how much money was in the register. According to the Virginian-Pilot, the would-be robber cursed then left.

Near Chicago, Illinois, a 23-year-old man was pulled over by police. During the traffic stop, he called 911 and said he heard eight gu.nshots and that a man had been shot and was lying on the ground a few blocks south of where he was. “Several officers drove to the scene with their emergency lights on,” court records state, according to the Chicago Tribune. When questioned, the man admitted he had phoned in the fake shooting in an attempt to get out of the several traffic tickets he was about to receive. In addition to tickets for illegal transportation of an open alcohol container, speeding, no seat belt, driving without lights and improper lane usage, the man received a felony charge for making the bogus 911 call.

This video may give you a new perspective on the cost of gas.Read more >

In Houston, Texas, two teenagers approached a motorist with a g.un, intending to take his car. Noticing it was a stick shift, they first asked the person they were car.jacking for instructions about how to drive it. After the driver provided a few instructions, the teens ordered him out of the vehicle, and he called police, according to the local Fox News station. A brief police chase ensued, but an officer for the University of Texas at Houston told the news station the teens “had issues operating the vehicle.” The pair opted to flee on foot and were later apprehended.

In Mayville, Wisconsin, two boys, ages 3 and 6, thought the best way to get in touch with the North Pole was by phone. So, the brothers used their Dad’s cellphone to place a 911 call, asking to be connected with Santa. The Beaver Dam Daily Citizen reports police responded to the home, and officers told the boys it was best to talk with Santa in person.

In Somerset, England, a “Guinness Book of World Records” fan has secured his own place in the book by collecting 353 editions of the book from around the world. According to UPI, Martyn Tovey, 57, said his collection started in 1968 when he won a Book of World Records as a prize at school and he has been receiving annual editions of the book from his mother every Christmas since 1971. Tovey said he’s managed to track down earlier editions and has also added numerous special editions including rare first editions signed by co-founders Norris and Ross McWhirter. The 353 editions earned Tovey the record for Largest Collection of Guinness World Records Annuals, and his 2,164-strong collection of Guinness promotional items earned him a second record for Largest Collection of Guinness World Records Memorabilia. Tovey said his collection includes board games, spoons and engraved glasses.

Have a great weekend, everyone!
Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.Read more >

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